Luno, like the vast majority of cryptocurrency exchanges, has just one type of trading account. In order to buy or sell bitcoin, one has to verify their account, which is being done through an SMS verification code. There are further levels of verification through government IDs and proof of residence documents. The higher level of verification provide higher monthly limit of transactions on the exchange. In fact, if one wants to buy or sell one bitcoin per month, as per the exchange rate at the time of writing this review, one has to have a Level 2 verification, obtained with the submission of a photo of a government ID. This, in our opinion, sort of defies the purpose of bitcoin’s anonymity.
Luno, like a small number of exchanges, offers spot trading only in bitcoin. Most of the larger platforms, like Coincheck, Coinbase, Cryptomate, have a much wider portfolio of cryptocurrencies. Perhaps one of the “champions” is Bisq, with 127 altcoins.
Luno notes that trading can be done with as little as €1, i.e. a client can buy €1 worth of bitcoin.
This platform, much like many similar exchanges, offers only spot trading in cryptocurrencies and does not support leveraged trading. There, however, are some, usually larger exchanges, who also support trading on margin – Kraken, Coincheck, Poloniex, CexIo, etc.
There is also a growing number of “traditional” forex and CFD brokers who offer speculative trading in cryptocurrency CFDs. The most recent addition to the list that expanded its portfolio is the Australian forex broker IC Markets, but there are plenty of others like IG, Plus500, FXTM, HYCM, Grand Capital, XTB, FxOpen, eToro, etc.
The Company. Security of Funds
Luno used to be known as BitX. The company was established in 2013, but in January 2017 rebranded as Luno and joined the fintech sandbox of UK’s Financial Conduct Authority (FCA). Nowadays the company, has set up its headquarters in London and is focusing on expanding its services in Europe. Additionally, Luno has offices in Singapore and Cape Town and offers its exchange services in Indonesia, Malaysia, Nigeria, South Africa for the local currencies.
In the United Kingdom and 35 other European countries (Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Greece, Guernsey, Hungary, Iceland, Ireland, Isle of Man, Italy, Jersey, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Monaco, Netherlands, Norway, Poland, Portugal, Romania, San Marino, Slovakia, Slovenia, Spain, Sweden, Switzerland, United Kingdom) where Luno offers its wallet, transfer and instant buy services, the supported currency is the euro.
The exchange is not regulated and is not required to be, but its membership in FCA’s sandbox suggests it is a reliable and serious company. According to data of Crunchbase, so far Luno has raised a total of $13.8 million in four rounds, the most recent being a Series B round with $9 million from Bladerton Capital.
Besides the spot exchange, Luno offers own e-wallet for storing bitcoins, as well as a money transferring service, again for bitcoins. Part of the clients’ funds (the majority) are stored in something called “deep freeze” storage. These are multi-signature wallets, with private keys stored in different bank vaults. No single person ever has access to more than one key. Access to funds from the deep freeze storage requires a coordinated effort with with multiple layers of encryption and security checks. Wallet backups are also stored in encrypted form.
A small part of client funds are kept in a hot wallet for instant withdrawal, but it is again multi-signature. One key is kept by Luno and another – by the multi-signature custodian leader BitGo.
Additionally, client passwords are stored in hashed form and nobody besides the client has access to the password. There is also a two-factor Authentication (2FA).
Similarly to Paybis, Luno offers its clients the option to sign in with their Google or Facebook account, but as we already noted, we find this somewhat disconcerting. We do understand that this is perhaps done for client convenience, but those social media accounts are fairly easy to be hacked. Logging in with a social media account serves as a verification level, but, again, we do not find this very reliable.
From the client comments in various forums we gather that Luno provides a simple and reliable service and so far has had no major problems.
Due to our location, we do not have access to the exchange platform of Luno, but only to the wallet and instant buy and sell options, so we cannot form an opinion on the trading platform. According to Luno’s site, it offers real time market information, mobile trading on Android or iOS, advanced charts, API access for automated trading, CSV export, trade history & reporting, depth liquidity indicators, fast bank deposits & withdrawals and competitive fee structure with market maker incentives.
Methods of payment
Like most of the cryptocurrency exchanges and trading platforms we have across so far, Luno also works with fiat currencies. Depending on the country, it accepts EUR, IDR, MYR, NGN and ZAR. The only way one can deposit or withdraw fiat currencies, is through bank transfer, which is not very convenient, considering the transfer fees and time limits.
There are cryptocurrency exchanges, like Paybis, who offer multiple funding options for fiat currencies, or at least credit and debit cards. There are even exchanges like Coinmama, Remitano, Coincheck and Paybis who accept cash payments in their offices or their agents’ offices.
We are not certain how much and when will Luno expand its services in Europe and will start offering the exchange feature, but at this point it could not compete as a wallet and money transferring service on this market. It may be easy to use, but the fact that the only funding method for fiat currencies is bank transfer, does not make it very convenient. After all, the goal of using bitcoin is to be anonymous and avoid the hassle of having to deal with the traditional bank system and its fees. Luno’s platform and its requirements defy both purposes.
Then, there is also the extremely limited number of altcoins on offer, i.e. just one – bitcoin. It is true that it is the most popular, but there are hundreds of other coins and most platforms offer at least several of the more popular.
Perhaps whenever Luno expands and develops further its service, it would be more sensible to recommend it, but for now we are not very impressed, at least with what we have on offer in Europe.
Luno Review Conclusion
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